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1-12-12: Dr Pepper deal leaves small-town Dublin with a bitter taste

Bottler's sale settles trademark dispute

For decades, anyone entering the First National Bank of Dublin could get a free bottle of sugar-sweetened Dublin Dr Pepper.

Not anymore.

Bank Vice President Pat Leatherwood said the traditional freebie ended Wednesday after word spread that Dr Pepper Snapple Group settled a trademark dispute by acquiring the rights to the Dublin Dr Pepper franchise from the local bottler, a family-owned, 121-year-old institution in the Central Texas town.

"As of today, I will never drink another Dr Pepper," vowed Leatherwood, reflecting the seething anger in the Erath County community of 3,700. Noting that the bottler was among the town's largest private employers and clearly its biggest draw, the banker added: "They have just slapped us and killed our economy."

On June 28, Plano-based Dr Pepper Snapple sued in federal court in Sherman, claiming that Dublin Dr Pepper -- its oldest and smallest bottler -- violated its licensing agreement by selling beyond its distribution territory and using an unauthorized logo, which carried the name of the town.

A unit of Dr Pepper Snapple will continue to distribute a sugar-sweetened Dr Pepper for the six-county territory in Central Texas, but the bottles will carry no reference to Dublin. Such bottles are already used in the North Texas market served by the corporate-owned distribution unit. Neither side would disclose the purchase price.

"Our main focus has always been on protecting the strength and integrity of the Dr Pepper trademark," said Rodger Collins, president of Dr Pepper Snapple packaged beverages. "We're pleased to reach an agreement that accomplishes that while also preserving the history and the special relationship Dr Pepper has with the Dublin community."

Renamed Dublin Bottling Works, the local company will produce its own brands of soft drinks, including Triple XXX root beer, which dates to 1895. It will also operate the museum and Old Doc's Soda Shop, where it can sell licensed Dr Pepper merchandise, said Jeff Kloster, vice president. But he said the company laid off 14 local employees Wednesday.

A steady stream of cars drove slowly past the museum honking, and residents said it was like losing a close friend. Many speculated that the small-town enterprise could not afford to defend itself in court.

When asked what prompted the settlement, Kloster, whose family operated the company for three generations, said: "We've been involved in this dispute since June. We came to a point finally where there was an offer on the table. Although it certainly was never our preference [to sell the franchise], it allowed us to operate with some certainty, to take the certainty and move forward."

Business leaders expressed concern over whether 95,000 visitors a year would still visit the museum now that it is no longer linked to the soft drink's oldest continuing Dr Pepper bottler.

Despite its cult following, many Texans were unaware that most of the sugar-sweetened version was produced for Dublin Dr Pepper by another independent bottler in Temple, which also supplied other territories, including the Metroplex. But Dublin Dr Pepper's bottles carried a unique label spelling out the Dublin connection.

After the suit was filed, the Kloster family vowed to take on the corporate giant and hired a Dallas law firm to defend the company. The community rallied behind the effort. A protest song about small-town values was recorded, a protest video was shot, 120 people turned out for a show of support, 12,000 people joined a pro-Dublin Facebook page and a legal defense fund was launched.

At first, many people didn't believe the news about the sale.

"I'm real astonished," said Steve Hightower, who heads the local economic development office. "The worst thing about this is that they didn't let us say goodbye.

"It was a David-and-Goliath matchup, and Goliath won," said Hightower, who had consumed a case of Dr Pepper a month but vowed not to buy the brand again. "I don't have a good feeling about Dr Pepper."

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